There are different solutions for that in the works, from sharding to plasma, etc.. and those have their own challenges & tradeoffs (namely in terms of security, etc..)

However engineering decisions 'on genesis' was over 3-4 years ago and at that time doing a blockchain with smart contracts was already challenge on itself. It's not really fair to take the knowledge and lessons from the present day and claim those in the past without that knowledge made horrible decisions. It's a bit like blaming google for not starting angular 1 with the functionality of angular 4, or saying that John Resig should have created Babel and ES7 features instead of creating jQuery.